July 24, 2012

To what extent do you believe that the clergy may intervene in
temporal matters, like politics and economics?

Well, I don’t believe a person loses his right to
pronounce on matters of importance just because he’s an ordained priest. Why should he?

Don't you believe it entails exercising moral authority to
influence the consciences of Catholics in matters over which there is freedom of
choice?

There is freedom of choice, and persons ought to exercise
it. Look, take the case of the North
American Bishops letter on the economy; they did not try to oblige the faithful
to accept everything they said. They tried only to persuade them that their point
of view was correct.

So the bishops granted that North American Catholics are free to
disagree with what they expressed in that letter?

Those bishops said they welcomed a debate. Is there something wrong with that?

Do you believe that, by publishing this letter, they enjoy a
special moral authority that they laity do not have?

No. In this instance there
was no such pretension. Although I
disagreed with much of this letter’s content, I believe it to be a model
of the way bishops ought to comport themselves, that is, trying to persuade people of
the merits of their position. At no
moment did they say, “anyone who disagrees is outside of the Church.” In summary, I believe that the clergy have
the same right as anyone else to speak out. They ask that others listen, but not necessarily agree with them about
everything. Now, I also believe that it
is certain that the clergy have generally not taken enough notice of what
economics teaches. It is important,
however, that the North American bishops seek to persuade and not oblige. As Catholics we ought to listen with special attention to what they have to
say.

Do you believe that the Church ought to exercise a preferential
option for the poor?

Yes. I believe that we
ought always to have a special consideration for the weakest and least
fortunate members of our society.

How should the preferential option be expressed?

This is an empirical question. If we want to eliminate illness, whom do we call upon? Doctors. If we want to eliminate poverty, we ought to consult economists.

What do you think about what is called the economics of
solidarity?

I’m not sure what they want to say. Certainly in the market economy there is
solidarity between employers and workers, for example, because there exists a
community of interests. The real
conflict is among different employers and among different workers. The Marxist myth of worker solidarity is
nonsense, because the workers hate each other, and the same goes for the
capitalists. If you want to buy a house,
you do not have a conflict of interest with the seller: your enemies are others
who want to buy. With the seller you
have a common objective, which is to arrive at a contract.

What is the relation between ethics and
economics?

There cannot be a conflict between ethics and economics, because
ethics is prescriptive and economics is descriptive. Economics shows you the probable effects of
certain policies, while ethics teaches what ought to be done.

Would you like the Pope and the bishops to support capitalism
openly?

Well, if they are going to support capitalism or something else,
I would prefer that they support capitalism, but ideally they shouldn’t support
either one. People who go to Mass on
Sundays should be able to leave their political ideas outside.

When you say that the objectives of the preferential option for the poor are realized better under a free and competitive market economy, are you
speaking as a priest or as an economist?

July 23, 2012

Do you believe that under certain circumstances the setting of a
minimum wage can help the poor?

The minimum wage works to exclude all those whose services are
valued at less than that minimum and, therefore, prevents them from obtaining
employment and, further, from acquiring the habits conducive to attaining
better positions.

Do you believe that the rich have an obligation to help the
poor?

Yes.

How ought they show it?

By being charitable, by helping the poor in effective ways, not
only by giving money, but also giving alms, building orphanages, etc. These are things that Christians have always
done, and it is hoped that the rich will do likewise. It is more
effective to appeal to generosity than to guilt.

Don’t you believe that the state ought to favor certain segments
of society that cannot compete freely in the market?

Absent regulations, most people can compete. In a genuinely free market, those who can’t are few in number, and it is easier for private charity to take care of
them than for state interventionists to grant them rights, for that only increases the number of the needy.

What effects on individual and collective morality do you
attribute to state intervention?

In Russia, the transformation of a way of life was the fault, not of
individuals, but of the system. In the
United States and Great Britain, the welfare state increased debt and marginalized
the family. Some blame the decline of the family on a permissive society, but I blame it on the government's assuming the family’s traditional role. People can see that they are obliged to play that role, not by coercion but
by market forces. It is the welfare state that has obscured individual responsibility and undermined what we call family values. Families are
the result of natural necessity; they were not invented when a group decided
“Let’s have families.”

July 22, 2012

I’ve already cited Leo XIII. It’s the only
rational way to allocate resources. If
people aren’t allowed to keep the fruit of their labor, they’ll have little
incentive to produce. Private property rationalizes production and increases
well-being.

If private property is that central to being
human, what happens to those human beings who don’t have any?

They’re in a better situation than if no one
did. In most cases, everyone has some private property. But, even so, the fact that someone has
private property benefits those who have none.

Just how does the private property of a few
benefit the whole?

The benefit isn’t a function of the paucity of property owners, but from the very existence of private
property. The market constrains producers to produce for the satisfaction of
society.

Do you believe that the right of property
ought to be limited for the common good?

It is important that the owner administer his
property in such a way that it benefits the commonweal. How is that brought
about? The problem is not whether or not controls exist, but rather whether
they are exercised by market forces or by state regulation and
intervention. I maintain that the market
solves this problem perfectly. Producers who do not adequately satisfy
society’s needs very soon find themselves without property.

Do you believe the laws of the market ought
always to function without intervention?

Yes, except when it results in harm to others,
like fraud, pollution, etc.

But during wartime, for example, we resort to
rationing and controls.

I agree with Henry Hazlitt, who held that precisely
in times of war it is imperative that the market works freely. The greater
the emergency, the greater the necessity not to intervene in the market’s
functioning. Rationing ought never be
permitted, because it results in shortages.

The Church seems to favor the laws of the
market, except when it comes to wages, and so she asserts that there ought to
be a “living wage,” a just wage that permits dignified living. What is your opinion?

There should be no intervention in the setting
of wages. It is good to create conditions that permit adequate compensation for
labor. But I don’t believe that that’s accomplished by intervening in
labor markets. That only creates benefits for some at the expense of others or in
the idleness of those “benefited.”If employers have the capacity
to pay an adequate salary, the market obliges
them to pay it.

July 21, 2012

But how are they established? The natural sciences permit the isolation of
variables for the purpose of experimentation, but that’s not possible in the
social sciences, where human complexity intervenes.

By means of mental experiments. One shouldn’t confuse prediction with the
immutability of law.

But, to analyze the problem of inflation, for
example, we have to factor in not only quantifiable aspects, but also
intangibles, such as expectations, perceptions, etc., about which we cannot
formulate immutable laws.

No, but let’s take another example: the
minimum wage. Can we say that the
establishment of a minimum wage leads to unemployment? Not necessarily. We would have to say that it would tend to
increase idleness, but
another factor, such as an increase in demand, can intervene, which can alter
the expected result.

In what sense do you claim that the laws of
economics are the “laws of God”?

How do you reconcile the idea of free will
with these immutable laws that condition human behavior?

How do you reconcile the idea of free will
with the immutability of the law of gravity? Look, if you throw me out of an airplane, I’m going to fall. One is free to be thrown or not, but not free
not to fall if that happens. Freedom
pertains to the action that produces a determinate result, but not with the
capacity to avoid those results.

If economic laws are so evident and immutable,
why do economists differ in a way that natural scientists do not seem to?

They do not disagree about whether or not
there are laws that are immutable. They disagree about whether a given law is
immutable. I believe, however, that differences
between economists are few and far between and these are greatly exaggerated. Between
Paul Samuelson and Milton Friedman there might be ten pages of disagreement. In
general, the disagreements do not concern laws, but rather politics, policy recommendations.
In any case, physicists also disagree with each other. The major difference is
that economists seek to establish not only laws, but also social priorities and
policies. But by doing the latter they are not supplying economic answers.

July 20, 2012

Some have said that capitalism is efficient
for producing wealth, and so is an advance over socialism, which only
distributes poverty. A really effective
means of distributing wealth, however, has not been found.

Of course it hasn’t, because the market does
not distribute wealth.

What is the Church’s position on the
distribution of wealth?

As far as I know, there is no official
teaching that holds that the equality of wealth would be desirable. What is wanted is a way to secure for all the
satisfaction of their basic needs, not equality per se. Leo XIII held [in Rerum Novarum] that
“a transfer of private goods from private individuals to the community” in
order to remedy existing evils “through dividing wealth and benefits equally
among the citizens,” is a program “so unsuited for terminating the conflict
that it actually injures the workers themselves. Moreover, it is highly unjust, because it
violates the rights of lawful owners, perverts the functions of the State, and
throws governments into utter confusion.”

To what extent is economics a science like the
natural or “exact” sciences?

I believe it is just like them.

But do you believe it has the same predictive
power

No. Economics cannot predict anything. If you maintain that, in order for something
to be a science, it must have the power to predict, then I would say that
economics is not a science in that sense, but rather in an older sense
of the term.

July 19, 2012

Don’t you believe that since capitalism
depends on the increase in consumption it promotes consumerist values?

I categorically deny that capitalism depends
on increasing consumption. The market
works at any level of consumption, and could even allocate goods in a society
of hermits. If desires change and,
instead of refrigerators, people want bibles, the market will be more
efficient in producing goods that they then consider more important. The market does not dictate what people want
or need, but satisfies whatever those needs happen to be. The belief that, absent any stimulation of or
increase in consumption, capitalism will collapse, is senseless. Now, the reduction in the consumption of
certain goods, from one day to the next, would leave some producers with
large unsold inventories. But such
events are not very probable. And an economic depression is not due to a sudden desire to lower consumption.

In what respect are monopolies endemic to
capitalism, as some claim?

Adam Smith was the great opponent of
monopolies. Now, when we speak of
monopolies, we refer to the government’s
granting oflegal permission to one
producer to be the sole producer in a given market, which removes from that
market others who can produce more or less.
Such a monopoly is not a product of the market, but rather imposed by
law precisely because the market did
not permit it. For a monopoly to emerge
on the free market, there would have to be only one producer in whole the world
of a certain product. We cannot say that
there is a monopoly in one country if the supposedly monopolized good is
produced elsewhere in the world. The
only important thing is legally permitted market entry by anyone. Curiously, the people who condemn capitalist
monopolies are the same ones who defend governmental monopolies in mail
service, telephones, etc., which anyone who wants to eradicate monopolies
should oppose.

You make a distinction between laissez-faire
capitalism and state capitalism. What
would you say about that?

Laissez-faire is simply what obtains when people are free to decide what to produce, how much, and whether to exchange
their product and with whom, without governmental interference. The government acts only to uphold the law
against fraud, robbery, to guarantee contracts, etc. As Friedman would say, the government is an
arbiter, not a partisan judge. The situation
closest to this is found in Hong Kong.
But the truth is that it has never existed in any part of the world,
because there are always degrees of intervention, from the minimal instances in
Hong Kong to the massive ones in the United States.

In one of your talks you said the Soviet Union also has a market. What did you
mean?

You see, a socialist economy cannot exist
except under conditions of extreme primitivism. The socialist experiment in
Russia ended around 1920. The gist of Marx
is that central planning does not mean “no intervention in the market,”
but rather the abolition of the market, the end of commerce, no more production for sale, no more money. If that situation does not obtain, then
there is no socialism in the Marxist sense. The Soviet Union has a market
economy: there is money, there is the exchange of goods. Today [1987], it has a highly regulated and
inefficient economy, due to a great deal of intervention.

If, as you maintain, the Soviet Union has a
market economy, then we have to invent a new word to distinguish it from those
Western . . .

Why not call them all “mixed economies”?

But then how would you distinguish the Soviet
economy, where the market neither allocates resources nor determines prices,
where the central authority plans what to produce, how it is exchanged, etc.?

Look, fortunately the Soviet economy is not all
that planned or its people would starve to death. Planning exists everywhere—in the United
States, in Chile, even in the Soviet Union—but it’s limited. I repeat: no “socialist” country has
socialist economics, because, in its strict meaning, it could only exist among
primitive tribes who live by hunting and gathering.

July 18, 2012

Do you believe that
economic systems are morally neutral? Or rather that capitalism does have moral
content because it stresses theeconomic and material
dimensions of human existence and therefore its doctrine may be fairly
described as “economistic”?

Why would you say
that? What is “economism”?

Well, there is the
Marxist idea that economic conditions determine human existence, values,
beliefs, etc. It is usually raised in
criticism of Marxism, but it is also attributed to capitalism.

I don’t know anyone
who affirms such an idea. No economist
holds anything like it.

Certainly there are economic schools that
analyze all institutions and phenomena, marriage, suicide, etc., from an
economic perspective.

Certainly those things have economic aspects, but they should not be
explained deterministically.

Are economic systems morally neutral or not?

Economic assertions are not value-judgments,
and morality has nothing to do with them. For example, to assert that
rent control must lower the standard of living is simply an assertion that I
believe is true, but it is not a value-judgment. It does not automatically imply that one is
for or against rent control. It says only that if rents are controlled there
will be certain effects. Morality pertains to ends, and economics to means. It
could be desirable to reduce poverty, and the economy offers the tools to make
that happen, but it does not determine whether or not that should be a
priority.

July 17, 2012

Why do you think “capitalism”
has such a bad reputation and that pejorative connotations attach to it?

Capitalism is associated with the hunger for
profit that follows from the capitalist premise that each person ought to be
free to do as he wishes provided he
does not prevent another from doing what he
wishes. This goes back to what we said about human
motivations and the confusions some have created between the profit motive and
the wider concept of the satisfaction of all desires and interests. Adam Smith held that the profit motive would
exist under any economic structure and that it is utopian to hope for its
disappearance. The advantage of the
market system—in which all players are subject to the rigors of competition,
free of gov­ernmental intervention—is that it creates a situation in which
businessmen can satisfy their desires only if they first satisfy the desires of
the general public. The market channels
this motivation into healthy and socially beneficial ways. When the state intervenes on behalf of
different interest groups, however, there is no guarantee that this will
redound to society’s benefit.

Won’t you even grant
the historical perception of the allegedly negative effects of capitalism upon
the working classes?

It’s almost impossible to convince people that
that negative version of capitalism’s initial effects is false, even though the
historical evidence refutes it. The images that come from English novels from
that era prevail. As C. S. Lewis once
said, the problem lies not in introducing new ideas into the popular mind, but in removing false ones. The idea of the
worsening condition of the poor due to capitalism seems ineradicable. But modern historians have amply shown that
the industrial revolution raised the people’s standard of living. The most obvious evidence is that it
permitted the population to increase, demonstrating at least that people under
capitalism could survive, whereas before they would die.

Do you believe the
Catholic Church has always been anti-capitalist?

Well, if one studies Catholic economic thought
in the Middle Ages and the Renaissance, we find Dominican, Jesuit, and
Franciscan clergy supporting quite modern economic doctrines. We find there the idea of utility, for
example. After all, the banking system began in Italy before the Reformation,
and the Italian cities originated finance capitalism. The French Revolution is a factor in the
Church’s opinion: it was associated with liberalism; liberalism advocated the
removal of feudal structures; and the Church was as much the beneficiary of
those structures as was the nobility.

But the social
teaching of the Church is generally regarded, rightly or wrongly, as anti-capitalistic. Is this a faulty reading of Rerum Novarum and Quadragesimo Anno, or were they, in fact, anti-capitalistic?

I believe that Rerum Novarum was certainly more favorable to capitalism than to
socialism. It maintained that capitalistic risk-taking leads to excesses and
therefore ought to be subject to certain controls—but that’s not a rejection of
capitalism’s essence. The belief that it should be controlled was not ethical,
but economic. They feared that if the market were permitted to operate freely something horrible would happen. But this is a claim that stems from an
economic, not a moral, judgment.

This prejudice of the
Church against capitalism is not limited to developing Latin countries: the
North American Bishops have issued a pastoral letter highly critical of the
capitalist economy.

So they did. I suppose they got the type of
economic advice they were looking for, the kind that left-wing economists
provide, more left-wing even than the Democratic Party’s Brookings
Institute. Well, I don’t share that
economic doctrine.

To what extent do
North American Catholics share those points of view?

Not much.

Has it led to any
response?

No, not either way. I don’t think it’s been
perceived as terribly relevant, although I won’t say it isn’t. I believe there
is a concurrence between what clergymen think and the viewpoints of certain
intellectuals. In the academic world economic ideas very similar to those
supported by the American Catholic Bishops still hold sway.

July 16, 2012

In 1987, Lucia Santa Cruz interviewed Mr. Ferrara’s inconvenient Jesuit, James A. Sadowsky, S.J., the
first Rothbard-influenced anarcho-Catholic,* for the Chilean daily newspaper El
Mercurio. Father Sadowsky’s answers
to her questions were translated into Spanish, and the interview appeared in
the November 22nd edition of that periodical and reprinted
the following year in an anthology edited by Eliodoro Matte Larrain,entitled Cristianismo, Sociedad Libre Y OpciónPor Los Pobres [Christianity, the Free Society, the Option for the Poor], which was published
in Santiago, Chile by Centro de Estudios
Publicos.

About ten years ago I attempted to render this interview into in
the expressions with which thirty years of friendship have made me familiar.
I was not happy with result, but only because he was not. (“It’s not English!,” he grumbled.) Although the result is looser than his
thought deserves, I no longer think it so
bad that the illuminating content of his thought—which I believe does pierce the wooden slats of my
translation—should be kept from a wider audience. And so after almost 25 years of waiting for
the truly bilingual kindred spirit to show up, I am publishing my amateur
version in the hope that he or she will find it (or you will tell him or her about
it) and be moved to ask me for a photocopy of Spanish text, which I will gratefully
supply.

The interview has been divided into nine consecutive posts, following
the subheadings of the original interview.

Some of you would want to know that Father Sadowsky’s health has
deteriorated over the past year. He is
well-provided for at the Jesuit infirmary in the Bronx, but pretty much alone
and forgotten. He needs your
prayers. If you wish to send him a note
of good wishes and appreciation, you may write him at Murray-Weigel Hall,
Fordham University, Bronx, NY 10458.

* In answers to
questions put to him in another interview by Martin Masse for Le Québécois Libre (Montreal) in 2002,
Father Sadowsky related this aspect of his intellectual journey. That interview was
published on June 7, 2003. Take
this link to it. To read eleven
essays by him on philosophical, theological, and economic topics, visit
the
Sadowsky portal on my site.

The Drive for Profit?

Capitalism rests on a specific idea of human
nature and its basic motivations. What
it is the significance of the assertion of capitalism’s philosophers who claim
that man is moved primarily by the desire to satisfy his own interests?

It goes far beyond looking for personal
material benefits. Man (however
tautological this may sound) does aspire to meet his needs, but in the wider
sense, which covers the most diverse kinds of needs. Good can be of any kind, and one can desire
them not only for oneself, but also for one’s family and for society as a
whole. To desire something is not
necessarily to desire it for oneself.

You don’t believe,
then, that it is synonymous merely with the drive for profit?

Well, why do you suppose the Red Cross plays
the market? To make money? Clearly so they can satisfy the needs of
others, not their own.

Underlying capitalism
is not only a conception of human nature, but also a theory of knowledge that
presupposes the human mind’s limited ability to scientifically grasp all
mundane realities.

It is often said that there is a relation
between belief in absolute truth and intolerance. I deeply disagree. I don’t see a logical connection between them
such that it leads to the persecution of dissenters. Indeed, I fail to see why a relativist must
be tolerant. There is nothing in
relativism that logically favors tolerance.

I am referring to
mundane matters.

So am I.

But behind the idea
that the market allocates recourses more efficiently than does central planning
is the notion that the human mind cannot grasp the infinity of complex variables
that comprise reality and, therefore that each individual ought to be free to express
his preferences on the free market.

Well, all you’re saying is that there’s no
such thing as human omniscience. But
belief in absolute truth is not the same as belief in human omniscience. I claim only that in some very limited areas,
the human mind cannot err. Being free of
error is not the same as having knowledge.
In other respects this immunity from error is limited and refers only to
a few matters. For example, I can truly
affirm that I exist. You’re right with
respect to what is claimed about the market, but that only shows that we don’t
know everything. That does not, however,
necessarily warrant renouncing belief in absolute truth.

There is a difference
between believing in absolute truth and maintaining certain true sayings
irrevocably?

That’s why I told you that in claiming that
one can know absolute truth, I refer to a few, very restricted areas where
there are infallible truths. I would say
that in nine out of ten cases knowledge is conjectural; but it is important
that there be cases of non-conjectural knowledge. I insist on this, you see, because
in defending capitalism one must be careful not to base that defense on inadmissible
pretensions. Let me take an historical
example. One reason why the Catholic Church was so opposed to continental
liberalism is that it built its case on skepticism. Anglo-Saxon liberals never fell into that. The continental liberal tradition is
skeptical and rationalistic. People like
Adam Smith or Burke, however, could not be further from this position. This skepticism formed no part of the English
tradition or of the classical liberal philosophers. This is important, because these
considerations color the perception of capitalism.

About This Blog

We defend Austro-libertarianism, both per se and as an option for Catholics, against the misrepresentation of Christopher A. Ferrara's, The Church and the Libertarian: A Defense of the Catholic Church's Teaching on Man, Economy, and State (Forest Lake, MN: The Remnant Press, 2010. iii+383 pp. Foreword by John C. Médaille.) In these posts the book will be referred to as TCATL. Numbers in parenthesis refer to the page(s) quoted from.

Our intended audience consists of

(a) those favorably disposed toward Mr. Ferrara's position, but whose integrity leads them to wonder what might be said against it;

(b) promoters of TCATL, especially certain Catholic academic reviewers of TCATL—for whom the prescription "charity in all things" should have special meaning—but who apparently have forgotten whatever they once may have known about standards of evidence, charitable construction of one's adversary's position, and other elements of the ethics of discourse. If they are satisfied that we have invalidated its evidence and exposed its disgraceful conduct of controversy, we hope they will be moved to retract their ill-considered endorsements of TCATL; and

(c) Austro-libertarians, Catholic or not, who are curious about this book-length attack on their beliefs.

When ancestors of portions of TCATL had appeared ina Catholic newspaper some years ago, we hoped more accomplished Austro-libertarian Catholics would reply. When we approached them about doing so, however, they advised us that that was a waste of time, ours no less than theirs. We are not certain they were wrong.

Apart from this review, promised years ago if the author would herd his farrago of complaints into a book, it is unlikely that the people he’d prefer to engage him in debate will do so. Our exposure of his exercise in illiberal propaganda constitutes probably the closest, if not the only, attention it will get from this side of the fence. On its merits, it deserves a one-sentence dismissal.

We thank the Remnant Press for the review copy they sent upon request, which we defaced with multi-colored highlighters in preparation for this review.

We speak only for ourselves and not for Tom Woods, Jeff Tucker, Lew Rockwell, or any other Austro-libertarian Catholic.